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Offshore drilling is in a "very, very strong” position thanks to global rig demand and the...

Offshore drilling is in a "very, very strong” position thanks to global rig demand and the booming oil and gas E&P business, Diamond Offshore (DO -1.9%) chairman James Tisch tells CNBC. Dayrates for sixth-generation rigs have risen from $400K/day a few years ago to $550K-$600K now, he says; natural gas is “transformative for our economy."
Comments (6)
  • dieuwer
    , contributor
    Comments (2553) | Send Message
     
    Why is Diamond Offshore not increasing dividends if business is so great? For almost three years now, regular dividends have been stuck at $0.125, while special dividends have been stuck at $0.75!
    3 Oct 2012, 03:24 PM Reply Like
  • Power Hedge
    , contributor
    Comments (995) | Send Message
     
    For starters, it's because Diamond Offshore's dayrates absolutely suck. I just had a look at their fleet and they only have one rig earning more than $500k a day and that's for an option that won't take effect until well beyond 2013! Even their brand-new rigs aren't getting $500k while their major competitors are (some are up in the $600k range now).

     

    I could probably count on one hand the number of rigs that they have deployed in the field right now that are earning more than $400k per day, let alone $500k. They could increase this a bit going forward with options, but the fact is that DO isn't getting the same rates that their competitors are.
    3 Oct 2012, 03:37 PM Reply Like
  • dieuwer
    , contributor
    Comments (2553) | Send Message
     
    Well, Transocean is even worse. Their stock price is no higher than back in...1998!

     

    Maybe stick with SDRL.
    3 Oct 2012, 03:39 PM Reply Like
  • saratogahawk
    , contributor
    Comments (2420) | Send Message
     
    Rig has faced some serious headwinds but is getting strong day rates. When the worm finally turns rig will skyrocket. Unfortunately, do continues to get weaker day rates so its profit potential remains constrained.
    3 Oct 2012, 03:50 PM Reply Like
  • Petrarch
    , contributor
    Comments (906) | Send Message
     
    10 times earnings, very strong FCF, little debt, conservatively managed, Tisch's know what they are doing and care about shareholders - of which they are the largest. Always. Always. Always bet on self interest.

     

    Buy this one - lock it in the vault collect your 5.7% per year and forget about it.

     

    P
    3 Oct 2012, 11:17 PM Reply Like
  • dieuwer
    , contributor
    Comments (2553) | Send Message
     
    Where are the dividend increases???
    4 Oct 2012, 08:13 AM Reply Like
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